EMC members to vote on ‘cleanest set’ of bylaws
by Kim Isaza
September 06, 2012 01:04 AM | 3654 views | 8 8 comments | 19 19 recommendations | email to a friend | print
 Ed Crowell, Chairman of the Cobb EMC Board of Directors
Ed Crowell, Chairman of the Cobb EMC Board of Directors
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MARIETTA — Customers of Cobb Electric Membership Cooperative will be asked to approve totally rewritten bylaws at the first regular members meeting in years on Sept. 15 at Piedmont Church.

Registration for the meeting will begin at 8 a.m., and the meeting itself will start at 10 a.m. Piedmont Church is at 570 Piedmont Road in east Cobb, and it is the same location where members have gathered three times in the last year to elect directors and decide other issues.

The Marietta-based electric cooperative serves about 170,000 members in several counties and is governed by a 10-member board of directors, all of whom are elected at large.

“I think it’s reasonable to say they’re probably the best, cleanest set of bylaws any EMC in the country is going to have,” Ed Crowell, the new chairman of the board of directors of Cobb EMC, said this week.

During the meeting, members will vote by a show of hands on the bylaw proposals, though if the vote appears close, paper ballots will then be cast and tabulated. The vote will also be recorded on videotape, Crowell said. Packets of the proposed bylaws have been mailed to members.

Among the updates in the proposed new bylaws are term limits for directors. Directors’ terms have always been three years, though there currently is no limit on the number of terms a director may serve. The proposed bylaws would allow directors to serve a maximum of four, three-year terms, or a total of 12 years.

The directors are also proposing to allow future voting to be done by mail or electronic ballot. About this time last year, the former directors asked members to allow mail-in ballots, but the question was overwhelmingly defeated. Many members, including the plaintiffs who sued the utility in 2007, said if mail-in ballots were allowed then, the former board members would still be directors today.

A member of Cobb EMC, Paul Chellis, has also proposed two bylaw changes: term limits of three, three-year terms (nine years total), and proxy voting. Those will be voted on separately during the Sept. 15 meeting.

In a letter to the Journal, Chellis asked: “If the President of the United States is term-limited to 8 years, isn’t a 9-year term limit long enough for a Cobb EMC Director?”

“These two member-submitted amendments will protect the interests of Cobb EMC members and will be a significant improvement in the new bylaws. The two amendments should be approved, along with the Board-proposed new bylaws,” Chellis wrote.

The directors, though, support mail or electronic voting rather than proxies.

“If you allow those, you can end up with one guy sitting over here with 400 proxies, and you could have 300 people sitting in the meeting, but one guy over here with all the proxies could run everything. That’s not one member, one vote,” Crowell said. “We can’t ever force members to be involved, but you can try to protect the membership as a whole from the worst of apathy. One little group of members can’t push everything — or the board can’t be totally off on its own without anybody having the ability to see that. These bylaws call for records to be open, for accountability in a much better, clearer way.”

In other matters, the board of directors is close to hiring a law firm to assist with a forensic audit, Crowell said.

“We are going to have a liaison who reports only to the board. We are going to have a law firm to consult on legal matters, and then working with them both there will be a CPA firm auditing,” Crowell said. “That will be our forensic audit team. The liaison will be hired through the law firm.”

The law firm has been selected, but is not yet under contract, Crowell said.

“I expect to have all the pieces in place by the end of November, or sooner,” he said. As for the total cost of the audit, Crowell is not sure what it will be.

“We’ll have to look at the scope,” he said.

The company, meanwhile, is introducing a whistleblower hotline for employees, with the calls taken by a third party, said CEO Chip Nelson. That company will then make reports to the board of directors as well as Nelson and human resources, Nelson said.

Former CEO Dwight Brown, who is under criminal indictment, is appealing to the Georgia Court of Appeals after Judge Stephen Schuster ruled in April that he has no right to his bid to be paid the $1.8 million left on his consulting contract instituted after his court-ordered retirement in February 2011.

“The consulting agreement between Cobb EMC and Mr. Brown violated the Final Order and Judgment and is void,” Schuster wrote in his April 4 order on the issue.

In fiscal 2012, which ended April 30, the company reported bottom-line margins of $13 million on income of $631 million and expenses of $618 million, according to chief financial officer Robert D. Steele. The figures include Gas South.

That is down from the $22 million net margin in fiscal 2011. That year, the company took in $685 million and reported $663 million in expenses.

Gas South’s income was down almost $6 million from fiscal 2011 due to the mild winter, Steele said.

Since announcing last spring that the company would retire capital credits from 1956 through 1971, about $1 million has been claimed, Crowell said, “and more claims are coming in on a regular basis.”

The utility’s 31,000 members from that era are owed just over $7 million in total. Any amounts unclaimed after five years can go to charity, economic development or educational work in the EMC’s service area.

“It can’t come back directly to the company, but in economic development, it could bring more business into the area that would grow EMC’s business,” said Crowell. He’ll be the featured speaker at the Cobb Chamber’s First Monday Breakfast next week.

The member-owned utility is also still trying to sell ProCore Solutions, a company set up under the old for-profit Cobb Energy firm.

In February, EMC announced it would sell the company and expected a deal to be closed by May 1.

Nelson said his company is currently negotiating with a buyer and has a short list of three suitors, whom he declined to name.

“I certainly hope we have good news for the board in September or October,” Nelson said.

ProCore was incorporated in 2000 and Cobb EMC initially invested $250,000 in the startup, an EMC spokesman has said. Cobb EMC owns the building that ProCore is housed in, on Cobb Parkway just north of Bells Ferry Road.

Cobb EMC has already hired some employees away from the call center firm, Nelson said.

“We have our own call center now, with 28 employees, many of whom came from ProCore,” he said.

And Cobb EMC will soon have new general counsel. Attorney Bob Silliman, who has represented the utility for many years, is retiring this year, and the company has just hired Moore, Ingram, Johnson and Steele, said Nelson. He declined to disclose financial details of what he described as a “handshake” agreement with the Marietta-based firm.

“John Moore and Kevin Moore will probably attend our meetings,” Nelson said.

Silliman was paid a per-diem to attend meetings, though Nelson could not say whether Silliman was also paid a retainer.

Finally, the company, which serves about 170,000 residential and commercial customers in Bartow, Cobb, Cherokee, Fulton and Paulding counties and in south Georgia and has installed “smart meters” for most of those customers, is looking to recoup the cost of serving the few hundred customers who do not want the smart meters.

But before the $20 per month fee begins showing up on the bills of non-smart-meter customers, the company will be reaching out to those people, Nelson said.

“We want to help them see the benefits of smart meters,” he said.

Said Crowell, the board chair: “We’ve approved the fees, but no fees are in place until we’ve communicated with the members.

“People have different levels of concern. Some people believe there’s government involvement in the meters. There isn’t. There’s no data going to the government. Other people have issues with the radio frequency. But the meters are really good things. They give people more control over managing their usage. Most people either understand that or haven’t given it a second thought.

“We’re moving to a really interesting era for our members. We’re getting quickly to the point where they’ll be able to go on and manage their usage and decide when they want to do things. We’re moving to giving folks better budgeting control by pre-paying, the way some people pre-pay for their cell phones. These are all things that are coming, and they’re coming partly because smart meters make it possible. It’s pretty neat. At the end of the day, if people don’t want to have a smart meter, they don’t have to have one. But they’re going to have to realize that costs the company more, so they’re going to have to bear that cost. There’s nothing punitive about it; that’s just the cost of sending someone to read the meter.”

 

Comments
(8)
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clmiron
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September 13, 2012


I think the bylaw changes are a step in the right direction, though there are clear signs that this process of updating the bylaws could benefit from more member input and more time. There are some vague references and some points within the bylaws that AGAIN could be used by future boards to keep members out of the decision making loop.

I also think it is inappropriate for the board to be in charge of voting on their own compensation, as indicated in the new bylaws, without any member recourse.

I hope the member offered amendments WILL be adopted by the membership. 9 years seems plenty long enough to make your mark, serve the organization, and move on without regret. I don't think anyone needs more than a decade sitting in one place to start to lose perspective and become entrenched like the former board.

I do think the amendment to allow proxies from someone outside of your household (but NOT an agent of the EMC) is also very helpful. Even in the event of future mail in voting, what happens in the event that your plans change at the last minute and you have already missed the time frame to mail in your ballot? Signing a proxy to allow a neighbor or friend to take your ballot to the meeting is an added convenience to busy people with ever changing demands on their time.
ConcernedCitizen201
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September 11, 2012
How about all the capital credits due to Cobb County Government entities. I found over $30,000 on the list due to Board of Commissioners & others under their chain of command. I have contacted my Commission member, but have not had a response. Cobb County citizens should bombard their BOC, demanding WHY these credits have not been claimed. The money could be used to offset any possible property tax increases. Where are you Commissioner Lee?? Mr. Hankerson????
What???
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September 11, 2012
To: Long Time Member

From: In Agreement

It's you and your silly assertations and baseless allegations that are comical.

For my part, I was just asking for an update from the Board on some very long festering issues that very unfair to Cobb EMC ratepayers. These are very good questions, from someone in the know of how things were run under Brown.

If they haven't done anything about them, just let us know. If they have, then also let us know.

By the way I am not a retired old cronie. I am a very well respected energy professional that is employed at an organization that is much better run, with higher ethical standards, and is much more respected in the industry than Cobb EMC, Energy Consulting Group, etc. was under Brown. It's up to the board to very soon demonstrate to ratepayers that things have changed for the better.

Unfortunately your vicious tirade makes you out to be part of the old guard clinging to the old corrupt, incestious ways of the past 10 or so years. Enjoy while you can.
Long Time Member
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September 08, 2012
I see four new possible board members below. How about practicing what you preach. You four don't have the guts to take on the responsibility of being a board member. All you want to do is sit back and make demands. Put your money where your mouth is. Besides, anybody that is on the board will never be good enough for you four. I figured once "Tripper" got on the board, everyone would shut up. Boy was I wrong. You just want to keep the same old song alive. If you had any sense you would know that things take time to organize and make changes, if it is done right. I guess the answer is, you are four old cronies that have been retired forever, and do not know what it takes to run a business in the correct manner. Your are really comical.
agreed
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September 06, 2012
I agree with Pat H. We need more transparency and we need these questions answered.

Is Cobb EMC still paying Brown’s attorney fees for his defense of his criminal indictment? They wee as of this past January.

Is JW Rayder, or his firm Ashby Consulting, still being paid in any way shape or form from Cobb EMC or any affiliate of Cobb EMC? Last we heard he was billing Cobb $40K/month for consulting services as well as paid an additional $30K per month to chair the Gas South Executive Committee.

Is Anis Sherali and his Energy Consulting Group still getting exclusive no bid engagements from Cobb EMC or any of its affiliates? Is Sherali still exclusively contracting, as well as managing the contract, with the company formed by Brown’s Texas buddy Cliff Hare (formerly Eagle Energy, now EDF Trading NA) to supply Cobb EMC with hundreds of millions of power per year, plus granting EDF unfettered use of Cobb’s transmission and generation assets?

In agreement
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September 06, 2012
I agree with Pat H. In addition we need to know:

Is Cobb EMC still paying Brown’s attorney fees for his defense of his criminal indictment? They were as of this past January.

Is JW Rayder, or his firm Ashby Consulting, still being paid in any way shape or form from Cobb EMC or any affiliate of Cobb EMC? Last we heard he was billing Cobb $40K/month for consulting services as well as paid an additional $30K per month to chair the Gas South Executive Committee.

Is Anis Sherali and his Energy Consulting Group still getting exclusive no bid engagements from Cobb EMC or any of its affiliates? Is Sherali still exclusively contracting, as well as managing the contract, with the company formed by Brown’s Texas buddy Cliff Hare (formerly Eagle Energy, now EDF Trading NA) to supply Cobb EMC with hundreds of millions of power per year, plus granting EDF unfettered use of Cobb’s transmission and generation assets?

mk-I salute you
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September 06, 2012
I agree w/ everything Pat H. says!

When oh when will the sheeple wake up and demand complete transparency!?!

The state of Georgia is # 1, NUMBER ONE, folks, in corruption!

Means we're all getting screwed & the politicians are getting away w/ it!

THANKS for following this so closely, Pat!!
Pat H
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September 06, 2012
We need more details about the cost of the new attorneys. Will both attorneys be attending with each being paid a per diem? What would that amount be? Why two attorneys at once? During derivative lawsuit, no less than 4 or 5 attorneys attended with Dwight Davis, and a couple of overflow sat in the benches to "observe".

Why not hire an in-house attorney and pay a reasonable salary for time worked. We are sick of being soaked by law firms because they can. Mr. Nelson, you cannot say whether a retainer was paid to Silliman? Why not?

We also need someone to speak with the press and compose messages to the members (who are owners) that are more detailed, specific and relevant that the bare-boned minutes or limited reporting in this paper.
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